03 December 2015 Walsall College Steve Sawbridge, AoC West Midlands
A generally positive picture: Growth up Inflation down Employment up But … Increased growth and employment are not generating the anticipated level of tax receipts … at least we thought so six months ago Debt continues at high levels so interest on debt remains high Borrowing is slow to fall So … Continued austerity and cuts to public funding but not as bad as we thought
Source: Office for Budget Responsibility, Nov 2015
National base rate for 16-19 years maintained for 4 years Core adult skills participation budget fixed in cash terms Apprenticeship levy 0.5% on payrolls over £3 million FE loans extended to 19 to 23 year olds on Level 3 and 4 courses Sixth form colleges given an option to convert to academy status But £160million savings to be made in 16-18 budget £360million savings from the adult skills budget
The commitment to maintain the 16-18 base rate together with the lagged funding methodology helps Some certainty on the aggregate adult skills budget But Increased competition and a declining 16-18 cohort don’t Continued shift towards apprenticeships with some funding uncertainty Introduction of loans for 19-23 year olds Devolution of the non-apprenticeship budget to Combined Authorities
Devolution and localism Growth and productivity 3 million apprenticeships over lifetime of this Government National colleges (and Institutes of Technology) Area reviews and financial viability Academisation - 500 more free schools and a UTC within reach of every city Funding protection for 5-16 education along with a national funding formula
Source: SFA, College Finance Record/Financial Forecasts
5.3% 0.2% 0.4% 8.9% Funding body grants Fee income Research grants and contracts Other income Endowment and investment income 85.2% Source: Skills Funding Agency analysis of college financial records 2013/14
100.0% 90.0% 80.0% 70.0% 60.0% EFA income 50.0% Skills Funding Agency income European income 40.0% Higher Education income 30.0% All other income 20.0% 10.0% 0.0% GFEC SFC All Source: Skills Funding Agency analysis of college financial records 2013/14
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Source: Skills Funding Agency analysis of college financial records 2013/14
Some or all of the following: Positioning the college to deliver apprenticeships Managing the cost of curriculum delivery Property sales to release cash (only open to some colleges) Relentless focus on student/employer demand and quality Collaboration and / or restructuring – Area Reviews Robust strategy and sound strategic planning Managed diversification … … or retraction from adult provision Planned risk-taking Strong, positive, realistic leadership
Higher education (full-time and part-time) International activity (here and overseas) Pre-16 education (14-16, school partnerships/sponsorships) High need pupils (16-25 or even younger age groups) Back-to-work programmes (eg Work Programme) Offender learning (prisons and probation) Full-cost courses Non-education revenue On-line learning
Financial How well does the college understand its current and future financial position, and what steps is it taking to remedy any issues identified? Operational How does the college identify, monitor, benchmark and respond to financial Key Performance Indicators? Strategic What steps has the college taken, or have planned, to respond to internal and external influences that impact on its capacity to offer appropriate and high quality provision ?
Constituent members Non constituent members Birmingham City Council Cannock District Council Coventry City Council Nuneaton and Bedworth District Council Dudley Metropolitan Borough Council Redditch District Council Sandwell Metropolitan Borough Council Tamworth District Council Solihull Metropolitan Borough Council Telford and Wrekin Council Walsall Metropolitan Borough Council Black Country LEP City of Wolverhampton Council Greater Birmingham and Solihull LEP Coventry and Warwickshire LEP
An overarching Strategic Economic Plan for the West Midlands Access to finance and a Collective Investment Vehicle Getting the transport offer right for the long term to improve connectivity and access to HS2 Creation of an economic policy and intelligence capacity to generate an evidence base A joint programme on skills Plus The West Midlands Productivity Commission The West Midlands Land Commission The West Midlands Commission on Mental Health and Public Services
West Midlands Combined Authority launched July 2015 Submission of devolution deal September 2015 Shadow Board established September 2015 Devolution deal agreed November 2015 Vesting date April 2016 Elections for Mayor May 2017
Addressing poor skills and economic exclusion System simplification Strengthening the connectivity between supply and demand Devolution of all employment and skills funding Alignment with the WM CA Employment and Skills Strategy
City regions that want to agree a devolution deal in return for a mayor by the Spending Review will need to submit formal, fiscally-neutral proposals and an agreed geography to the Treasury by 4 September 2015. Devolution deals (pre* & post election) *Greater Manchester (Oct 2014) Sheffield City Region (*Dec 2014, Oct 2015) *London (Mayor) (Feb 2015) *West Yorkshire (Mar 2015) Tees Valley (Oct 2015) North East (Oct 2015) Liverpool City Region (Nov 2015) West Midlands (Nov 2015)
Control of an additional £36.5 million per year funding allocation over 30 years focused on economic growth A directly elected Mayor by May 2017 Significant responsibilities for transport including public transport and highways Fully devolved funding for adult skills from 2018/19 Joint responsibility with DWP for employment support for ‘hardest to reach’ Creation of a further Enterprise Zone around the HS2 terminus Support for extensions of the Metro in Birmingham and The Black Country Planning powers which mirror those of the Homes and Communities Agency Further public service reform including possible devolution of the youth justice service
Almost identical to proposals in other devolution deals (Liverpool, Sheffield, Tees Valley etc.) Devolution of ‘other’ Adult Skills Budget i.e. not Apprenticeships nor 16-18 funding but does include funding for 19+ continuing students Creation of an Employment and Skills Strategy taking into account the wider LEP geography Outcome agreements with providers about ‘what should be delivered in return for allocations’ Employment and Skills Strategy developed in partnership with colleges and providers following Area Reviews CA responsible for chairing subsequent Area Reviews which will include analysis of all post-16 education and training
For 2016/17: Development of a series of outcome agreements with providers in return for 19+ allocations ‘Single block’ allocation for 19+ For 2017/18: Freedom to vary allocations within an agreed framework For 2018/19: A new funding formula for allocation to Combined Authorities Fully devolved responsibility for allocations to providers set against agreed outcomes Contingent on readiness conditions being met
Legislation to transfer responsibilities is in place Completion of Area Reviews Agreed arrangements to secure a sustainable and financially viable post-16 provider base Arrangements to share with central Government financial risk and management of post-16 providers Arrangements for funding and provider management including financial assurance and minimum standards
The Mayor Who is this likely to be? Level of public mandate / support The political geography Metropolitan council versus three LEP geography Telford and Wrekin Unitary Authority included as non-constituent member but is outside both the West Midlands metropolitan area and the three LEP area Some district councils within the three LEP geography have not yet and may not opt for non- constituent membership The position of Warwickshire County Council (in the LEP but not the CA) Relationship with the three LEPs at individual and CA levels Creation of a single LEP? Splitting Telford and Wrekin from The Marches LEP ? Public engagement Little sign of any meaningful consultation to date Timescale Widely anticipated to slip
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